Lingering Bad Debts Stifle Europe Recovery

By

Gabriele Steinhauser in Dublin and

Matthew Dalton in Capelle aan den IJssel, Netherlands

Jan. 31, 2013 11:00 p.m. ET

The moving boxes were in Emer O'Grady's bedroom, waiting to be packed with the contents of a home she can no longer afford. But selling her three-bedroom brick house in the north of Dublin hasn't ended her financial bind: The 34-year-old psychotherapist and her former partner still owe some $340,000 on their mortgage.

Ms. O'Grady is a member of Europe's Generation Negative Equity, homeowners in their 30s, 40s, and 50s who bought houses during a property bubble that burst after the global financial crisis struck in 2008....